April 2 Financial Disclosure Filing Promotes Transparency in Government
In California, public officials at every level of state and local government must disclose their personal financial interests, as well as any financial interests held by their spouses or registered domestic partners and dependent children. The purpose of financial disclosure is to alert public officials to personal financial interests that might be affected while they are performing their official duties, so that they can avoid conflicts of interest.
A conflict of interest occurs when a City official has a personal interest that is affected by a government decision. There is nothing improper about the fact that a conflict exists—it simply means that the official cannot make, participate in making, or influence the government decision. Avoiding conflicts helps ensure that government decisions are made in the public's best interest, without regard to any individual's personal financial gain or personal interests. It also creates transparency in the political process and helps to promote the public's confidence in government actions.
As a means of promoting an environment of governmental transparency, the Political Reform Act requires each City department to adopt a Conflict of Interest (COI) Code. A COI Code identifies every position in a department that makes or participates in making governmental decisions, including most board members and commissioners. Each designated position is assigned a disclosure category, which explains the types of financial interests that must be disclosed, based on the types of governmental decisions a person in that position would be required to make. In addition, state law requires financial disclosure on the part of certain City officials not listed on departmental COI Codes, such as elected officials, planning commissioners, the City treasurer, and the City's chief administrative officer.
City officials who are required to disclose their financial interests must do so by filing a Statement of Economic Interests (SEI) or CA Form 700, even if they have no reportable interests to disclose. In addition, department heads, board members, and commissioners, also complete a CEC Form 11, while the commissioners and executive director of the City Ethics Commission and all City elected officials also complete a CEC Form 10.
Each City agency has designated an ethics liaison who is responsible for soliciting, processing, and forwarding SEIs to the City Ethics Commission. Ethics liaisons can also provide filers with their department's COI Code and filing instructions. While ethics liaisons should remind designated filers of any pending deadlines, it is each filer's responsibility to file properly and on time.
Some of the kinds of financial interests an official may be required to disclose on an SEI are:
- Sources of income of at least $500;
- Sources of loans;
- Sources of gifts worth at least $50;
- Investments in a company worth at least $2,000;
- High-level positions with a company; and/or
- Interests in real property of at least $2,000.
An employee who approves contracts for goods or services, for example, may not be required to disclose real estate interests but may be required to disclose investments in businesses that supply goods or services.
City officials who are required to file SEIs must do so when they assume and leave a designated filing position. During their tenure with the City, filers must also complete annual SEIs, which must be filed by the first business day of April every year and require the disclosure of financial interests held during the previous calendar year.
If you are a designated filer, you are required to file this year's annual SEI with your ethics liaison no later than April 2, 2007.
Please bear in mind that filing deadlines cannot be extended and monetary penalties apply to late and incomplete filings. Exemptions to annual filings apply only to City officials who have filed a leaving office SEI prior to the annual deadline or an assuming office SEI between October 1 and December 31 of the previous year. Because SEIs are public documents that must be made available to anyone who requests them, we recommend that you use a business address when completing your forms.
Where can I get more information?
The City Ethics Commission is happy to help if you have questions or need help obtaining or completing your SEI. Please call us any time at (213) 978-1960.
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